Colorado Springs veteran sues USAA for denying husband’s $1 million life insurance policy

[adjusterjack]

OK, that was my understanding, that some U.S. states use the Canadian fraud exception.

Not exactly. The Canadian fraud exception is written into Canadian policies making it a contractual obligation. I don't recall ever seeing a US policy with that exception written in. In the US the fraud exception would be created by the courts based on the circumstances which means that the decision could go either way in any particular case. In the example I provided, NJ could potentially allow it, NY did not.

To determine the positions of other states you would have to do state by state research. Google Scholar is a good place to start researching case law.

Next we can ask an agent from that state(s), who sell in that state, for a sample policy wording or copy of the applicable law which sets this out.

That would show you the policy wording but not necessarily that state's judicial rulings on the fraud exception.

I should explain that NOTHING irritates me more than when I hear of a life insurance company declining payment of a death benefit. This industry makes money selling paper that has a promise. When there is even the slightest hint that the promise is no good, it hurts the entire industry.

Give me a break. The American life insurance industry is worth so many gazillion trillion billion dollars that denying an occasional death claim for good cause isn't going to hurt it one bit.


People don't think twice about defrauding insurance companies and would do it a lot more if it wasn't for the contestability clause in life insurance policies and the Concealment, Misrepresentation and Fraud provisions of property-casualty policies and the potential criminal prosecution for fraud.

 

[Robert Barney]

Give me a break. The American life insurance industry is worth so many gazillion trillion billion dollars that denying an occasional death claim for good cause isn't going to hurt it one bit.

I am not convinced this particular death claim was denied for good cause and bad news always travels fast. This is not good PR.

People don't think twice about defrauding insurance companies and would do it a lot more if it wasn't for the contestability clause in life insurance policies and the Concealment, Misrepresentation and Fraud provisions of property-casualty policies and the potential criminal prosecution for fraud.

There is no comparison between P&C fraud and life insurance fraud. To defraud a life insurance company someone has to die. I realize you could lump in Waiver Premium and Disability, but that's not what I am talking about.

Again, in this case, I doubt very much that either the insured or beneficiary imagined that snoring was risky and could lead to death.

 

[somarco]

Many people snore for different reasons completely unrelated to OSA. Obesity, deviated septum, sinus infection, alcohol consumption, etc.

Just because someone snores doesn't mean they have or will have a cardiac related issue.

My wife says I snore but I have never heard it so I don't snore.

 

[LGilmore]

It should come down to chart notes from his doctor. Until it is diagnosed, it doesn't exist. (labs would be a different case) How would they know he snores? I have a feeling his doctor's chart notes are where the answer lies. Sleep apnea is diagnosed by O2 levels within the body, usually through a sleep study.

In my case my breathing ceased about 62 times in an hour. My O2 levels in my body were down to the 60's. I had surgery done which involved cleaning up my broken nose, removing a bit of my upper pallet and that little thing that hangs down, oversized tonsils and they widened my throat. I still snore according to my wife, but my O2 level is up in the high 90's now.

Sleep apnea is like diabetes, it can be the base cause for heart problems and other organ problems. Usually, a carrier will reduce class or table or decline based on chart notes.

I have to think they have chart notes to back this position. They can't just guess.

 

[FinalExpenseDojo.com]

The problem for the family on this one is the application is asking if he had ever CONSULTED a doctor for respitory issues.

To be perfectly honest I don't believe I know anyone who has NEVER been to the doctor for a cold/flu with a stuffy nose at some point in their life.

That means that basically everyone should be marking that question yes.

What someone else said earlier couldn't be more true. If there was an agent that was part of the sale this could have been avoided. Very sad & unfortunate situation!

 

[Robert Barney]

It should come down to chart notes from his doctor. Until it is diagnosed, it doesn't exist. (labs would be a different case) How would they know he snores?

I am wondering if adjusterjack can respond to this point.

 

[Robert Barney]

What someone else said earlier couldn't be more true. If there was an agent that was part of the sale this could have been avoided. Very sad & unfortunate situation!

Can you buy $1m from USAA without talking to an agent?

 

[somarco]

Can you buy $1m from USAA without talking to an agent?

USAA is a direct writer. Unless they have a consumer facing app if you want to apply you are talking to a HO representative who is (presumably) a licensed agent.

Kind of like the fox guarding the hen house.

Vaguely worded questions should weaken the claim denial on appeal

 

[Robert Barney]

Vaguely worded questions should weaken the claim denial on appeal

I went to the site:

Enable Cookies | USAA

Put in some data and got this page, with this question:

Do you have a history of a medical condition that has required a doctor's care, such as cancer, diabetes, depression, heart disease, chronic breathing disorder, anxiety, post-traumatic stress or sleep apnea?​

So the question will be if anyone told him he had "sleep apnea". But I would not consider "snoring" to be a "chronic breathing disorder" and I would not consider it necessarily "sleep apnea".

I think Gilmore is correct, it will depend on what is in his medical records.

 

[scagnt83]

It should come down to chart notes from his doctor. Until it is diagnosed, it doesn't exist. (labs would be a different case) How would they know he snores? I have a feeling his doctor's chart notes are where the answer lies.

I am wondering if adjusterjack can respond to this point.

Definitely not true in an underwriter's eyes.

I've had declines based on medical notes that were not a true diagnosis. Or provisional declines until the doctor actually states for the record if a certain ailment is indeed a chronic condition or not.

That is why many apps use the wording "consulted with physician" instead of or in addition to "diagnosed with".